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On Wednesday, 46 countries signed the Singapore Convention on Mediation at a ceremony attended by over 1,500 delegates at the Shangri-La Hotel in Singapore. As reported earlier this month, the Convention, which is officially titled The United Nations Convention on International Settlement Agreements Resulting from Mediation, aims to address the lack of harmonised framework for cross-border enforcement of settlements procured by mediation.

The full text of the Convention, which can be found here, was approved by the UN Commission on International Trade Law in June last year and was adopted by the UN General Assembly in December.

Among the Convention’s signatories are the USA, China, and Singapore, and the complete list of signatories can be found here. Notably, neither the UK nor any members of the European Union are among them. Despite this, there is something to be said for the enthusiasm of countries in Asia-Pacific (being the majority of the signatories) and their engagement with the project. This, along with various other initiatives being taken by such countries, in particular, Singapore’s commitment to investing in its dispute resolution infrastructure, could pose a serious threat to London’s dominant position in the world of international commercial dispute resolution.

Despite this, it is hoped by many across the globe that the Convention will be as much as a success for cross-border mediation as the New York Convention was for arbitration. Given that (a) the Convention will only come into force six months after it has been ratified by three signatories, and (b) each state must then adopt it into their domestic laws before it can be applicable, it will be some time before the impact of the Convention can be accurately determined.

Following several years’ effort by a working group of the United Nations Commission on International Trade Law (UNCITRAL), including with input from as many as 85 countries and 35 Non-Governmental Organisations, a draft legal framework for international commercial mediation has been concluded. The framework consists of a Convention on the Enforcement of Mediation Settlements (together with a corresponding Model Law) which is understood to be named the Singapore Mediation Convention.

The initiative, which stemmed from a concern as to the enforceability of mediated settlements, aims to remove the potentially lengthy and difficult processes that parties who participate in an international meditation might currently face when attempting to enforce the outcome in a foreign jurisdiction (such a process would typically involve first obtaining a court judgment before any necessary enforcement procedures).

Consequently, the aim of the Convention is to implement an international regime for the enforcement of mediated settlements that is broadly similar to the successful 1958 New York Convention for the enforcement of arbitral awards and which will make it easier for businesses to enforce mediated settlement agreements with their cross-border counterparts. It is hoped that this will increase the credibility, and therefore attraction, of mediation for international parties.

The Convention will be open for signature from 7 August 2019 and it is understood that representatives from at least 50 countries across the globe will be attending the ceremony which is to be held in Singapore. Of these countries, around half (including the USA and China) have indicated that they will sign the Convention. It will then come into force once it has been ratified by at least three of the signatories.

General Dynamics United Kingdom Limited v. The State of Libya [2019] EWCA Civ 1110

In a recent decision, the Court of Appeal has held that the Courts may order that the formal rules of service can, where appropriate, be dispensed with when a party is seeking to enforce an arbitration award against a State.  The decision also comes as a warning to States that they will not necessarily enjoy some of the protections to enforcement proceedings that they may once have had if they have already participated in, or indeed have refused to participate in, the initial proceedings or if there are special circumstances at play: the decision shows the English Court’s willingness to bypass at least some of the usually required formalities of service where effecting proper service would be in a real way overly problematic, risky or lengthy

Background

In 2016 the Claimant obtained an ICC arbitration award against Libya in the amount of £16 million.  Following Libya’s failure to pay and following an unsuccessful attempt to enforce the award in the USA, the Claimant sought instead to seek enforcement in England.

In 2018, the Claimant obtained an Order from the Commercial Court permitting it to enforce the Award in England and, due to the serious internal conflict in Libya and issues relating to its proper and rightful government, permitting it to dispense with formal service.  Instead, the Order was required to be brought to the attention of Libya by the sending of it to three specific addresses – which it was.

Within time, Libya applied to set aside the parts of the order that dispensed with service, arguing that service of court proceedings is governed by S.12(1) of the State Immunity Act 1978 (the “SIA”), which provides that "Any writ or other document required to be served for instituting proceedings against a State shall be served by being transmitted through the Foreign & Commonwealth Office to the Ministry of Foreign Affairs of the State".

Males LJ agreed with Libya and concluded that the court has no power to dispense with service in a case such as this and that arbitration enforcement proceedings (and all other documents relating to instituting proceedings against a state) must be served in the manner provided for in s.12(1) SIA (i.e. through the Foreign and Commonwealth Office (the “FCO”)).

The Claimant appealed the decision to the Court of Appeal, arguing that neither the Order nor the Claim Form initiating the enforcement proceedings were documents to which s.12(1) SIA applied.

The Decision

The Court of Appeal allowed the appeal in part, restoring the earlier Order of the Commercial Court and holding that, despite the earlier decision of Males LJ, the Claimant could dispense with formal service against Libya.

In making its decision, the Court of Appeal considered that when a State is first sued, it is natural that the document “instituting proceedings” should be served through the FCO, as required by s.12 SIA. However, if the State then fully participates in the subsequent arbitration or litigation (as Libya did in this case), or even if it deliberately refuses to participate, it no longer requires the protection of enforcement proceedings being transmitted through the FCO.  In the Court’s view, neither the Order nor the Claim Form initiating enforcement proceedings was analogous to a document “instituting proceedings.”

The Court of Appeal went on to find that while an order permitting enforcement of an arbitral award must still be served on a State, service does not need to follow s.12 SIA and thus, in appropriate cases, an English court may dispense with the normal rules of service.  For example, when the order permitting enforcement of an award is to be the first time that the State receives notice of an attempt to enforce, an English court can dispense with formal service where there are “exceptional circumstances” (under Civil Procedure Rule 6.16).  Given the internal conflict and danger within Libya, and the considerable length of time any such formal service might take, the Court of Appeal held that exactly such exceptional circumstances existed in this case.

However, protection remains in place for States even where formal service may be ordered to be dispensed with:  the Court of Appeal concluded that even where the court permits a relaxation of the rules of service, as it did in this case, States will still be given a period of time (usually two months) in which to challenge an order permitting enforcement of an arbitral award, with no risk of execution against its assets in the meantime.

Originating as an extension of French copyright law in the 1920s, an artist’s resale rights, or droit de suite, is now a common feature of an artist’s moral right across Europe. Such right affords artists royalty payments upon subsequent sales of original works of art. In stark contrast, however, the US codified what is known as the First Sale Doctrine, whereby the copyright holder’s right to control reproductions and displays of an artwork does not extend to the original work itself, thus limiting absolute ownership and pre-empting the artist from having an interest in the resale of such work. This doctrine was codified in the federal Copyright Act 1976 (FCA).

Only one year later, in 1977, California attempted to challenge the First Sale Doctrine by enacting the California Resale Royalties Act (CRRA) which granted artists an unwaivable right to 5% of the proceeds of any resale of their artwork in specified circumstances, such right being akin to that afforded to artists across Europe.

In 2011, several artists and their successors sought recovery of these royalties from Sotheby’s, Christie’s and eBay. After a seven-year legal battle, with the Ninth Circuit Court of Appeals (“Ninth Circuit”) having already limited the resale right to sales only within California in 2015, the case came to the Ninth Circuit once more. In its recent ruling, the Ninth Circuit has limited such rights even further by holding that the FCA pre-empts them in their entirety. However, the predecessor to the FCA (the Copyright Act 1909) did not pre-empt such rights. The court found that the artists did have a right, but it was limited to a one-year period: from 1 January 1977 when the CRRA came into force until 1 January 1978 when the FCA became effective.

This decision highlights the distinctions between the US and the European attitudes towards royalties, despite the US becoming a signatory to the Berne Convention, which recognises an artist’s right to an interest in subsequent sales of artworks, back in 1989.

It is thought that the royalty right provided by the CRRA has been neglected by many of California’s galleries and auction houses. However, this decision will affect those artists who have been actively collecting their royalties, and throws into question any past or future attempts by either the federal government or other states to enact legislation granting royalty rights across the US.

On 12 June 2018 the Court of Justice of the European Union (CJEU) issued its decision in Case C-163/16 Christian Louboutin v Van Haren Schoenen BV, ruling that a mark consisting of a colour applied to the sole of a high-heeled shoe, is not covered by the prohibition of the registration of shapes. The mark does not consist ‘exclusively of the shape’.

Over 5 years ago, Christian Louboutin registered a trademark in Benelux for ‘footwear’ and ‘high-heeled shoes’ which is described as consisting “of the colour red (Pantone 18 1663TP) applied to the sole of a shoe as shown (the contour of the shoe is not part of the trade mark but is intended to show the positioning of the mark)”. Shortly after registration, Louboutin initiated a claim for trademark infringement against Van Haren, a company selling women’s shoes with similar red soles in the Netherlands. In response to such claim, Van Haren alleged that Louboutin’s trademark was invalid as it fell into one of the grounds in which registration of a trademark might be refused or declared invalid under the EU Trademark directive, particularly that the sign consisted exclusively of a shape that gives substantial value to the goods. After hearing such claim, the Netherlands court referred a question to the CJEU, asking whether the concept of ‘shape’, within the meaning of the directive, is “limited to the three-dimensional properties of the goods, such as its contours, measurements and volume […], or does it include other (non-three-dimensional) properties of the goods, such as their colour?”.

Following an opinion of Advocate General Szpunar (AG Szpunar) in 28 February 2017, the question was transferred to the Grand Chamber in September 2017, and subsequently AG Szpunar gave a second opinion in February 2018 following the reopening of the oral procedure and a further hearing. In this second opinion, AG Szpunar opined that a mark combining colour and shape may be refused or declared invalid under the directive, adding that the analysis must relate exclusively to the intrinsic value of the shape and take no account of attractiveness of the goods flowing from the reputation of the mark or its proprietor. This view, although not binding on the CJEU, led to a number of misleading and negative media reports suggesting that Louboutin was going to lose its trademark protection. Louboutin responded by taking the rare step of commenting on a not yet final legal matter and arguing that the opinion “supports trademark protection for our famous red sole, rather than threatening it.”

In its very short and concise decision, the CJEU, acknowledging that the directive provides no definition of ‘shape’, focussed instead on its meaning in everyday language, such that a colour per se, without an outline may not constitute a shape. Further, they took the view that a mark cannot be a shape “in the case where the registration of the mark did not seek to protect that shape but sought solely to protect the application of a colour to a specific part of that product.”

Given the negative media attention bought about by the earlier opinion of AG Szpunar, Louboutin were quick to welcome the CJEU’s decision with a statement proclaiming that “the protection of Christian Louboutin’s red sole trademark is strengthened by the European Court of Justice” and suggesting that “the red colour applied on the sole of a woman’s high heel shoe is a position mark, as Maison Christian Louboutin has maintained for many years.”

Whilst the decision is a step in the right direction for Louboutin, the outcome is yet to be finalised with the ultimate decision as to whether the trademark is or is not invalid now being passed back to the hands of the court in the Netherlands.

The US District Court for the Eastern District of New York has recently ordered a real-estate developer to pay an extraordinary sum of damages (totalling $6.75 million) to a group of artists to compensate them for destroying a large number of graffiti art on the 5Pointz building in Queens, New York City (see decision of 12 February 2018 here).

5Pointz, originally a largely dilapidated former factory in a crime infested neighbourhood of NYC, has been owned by Jerry Walkoff since the 1970s. After being approached by street artists for permission to paint on the outer walls of the building, granting such permission and putting Jonathan Cohen, a famous street artist, in charge, 5Pointz soon became a major attraction drawing thousands of visitors and being used in movies, on television and music videos.

All this came to an abrupt end when the graffiti art was whitewashed by Mr Walkoff following the denial of a preliminary injunction for the prevention of a planned demolition of 5Pointz, but before the court had made a final decision.

The artists went on to request damages for the demolition of their graffiti art on the basis that Mr Walkoff had acted contrary to the Visual Artists Rights Act (VARA) which grants some moral rights to artists (such as rights of attribution and integrity).

The court considered the artists’ right of integrity, whereby the artist can prevent the destruction of a work of visual art when it is of recognised stature or is prejudicial to the artist’s honor or reputation. The court had no problem in finding that 45 of the 49 works had recognised stature and commented that “even under the most restrictive of evidentiary standards almost all of the plaintiffs’ works easily qualify as works of recognized stature.” The key evidence accepted by the court included the testimony of an expert art appraiser, Renee Vara; as well as of Jonathan Cohen himself, described by the court as “one of the world’s most accomplished aerosol artists.”

The main contention of Mr Walkoff was that street art works are ephemeral and that VARA should not afford protection to temporary works. This was however rejected by the court who found that, although VARA does not directly address the issue, it resolves the tension between building owners’ rights and the artist’s rights, thus protecting temporary works. Section 113 of VARA provides protection in two circumstances when a protected work of art has been integrated into a building: (i) when the artwork cannot be removed from the building (in this case the artist may sue to prevent the destruction of the work unless he waived this right) and (ii) when the artwork can be removed, so contemplating that the work can be temporary.

In the latter case, VARA gives the opportunity to the artist to save the work upon receipt of a 90 days’ written notice from the building owner. If the artist fails to remove within the 90 days or if the owner could not notify the artist after making good effort, the artist’s VARA rights are deemed waived and the owner may destroy them without consequences. No such notice was given by Mr Walkoff in this case.

The Court therefore went on to find that the artists’ works were legally protected under VARA and that Mr Wilkoff willfully broke the law in destroying 5Pointz before having the Court’s permit and failing to give the 90 days’ notice to the artists to remove their works provided by VARA. The size of the award represented a total of statutory damages for the individual works concerned awarded at the maximum level. One of the strongest factors behind the award of damages at the maximum level was Mr Walkoff’s attitude and the audacity of the destruction. In contrast the artists were seen to have “conducted themselves with dignity, maturity, respect, and at all times within the law”.

The decision, although on its face a triumph for street artists, could leave real estate owners reluctant to allow artists to use their buildings for the creation of such art.